Who Determines The Price Of Gold?

Who Determines The Price Of Gold?

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As the price of goods in the market of real as well as in financial markets, the price of gold is the result of the strength of the buyer and the seller in a free market. However, if we are specifically talking about the price of gold, then there is an awful lot ofmarkets where the commodities are traded. There is a futures market, spot market.There is a market of London, there is the New York market. So, who determines the price of gold? Arkadiusz Sieron, certified investment advisor, presented at length inhis column on the site Resource Investor.

London And New York Are Not Dominant

Sieron discusses some scientific study that examines the topic of who determines the price of gold. One of them, Lucey et al. (2012) monitor oil prices from London A.M. Fixing and closing price of COMEX New York since January 1986 until the end ofJuly, but found that there was nothing between them dominate on the market.

London and New York, according to the term Sieron, is bipolar world and interdependence with each other. Interestingly, the researchers also found that the share of the contributions of both the market at any price is unstable, depending on the situation. While the collapse of the Soviet Union, the exchange rate crisis of 1992 and theLehman brothers incident, London was the dominant market. But when the ruble currency crisis and the attacks of 9/11, New Yorkers tend to be mastered.


The Futures Market Power

Meanwhile, Hauptfleisch et al. (2015) intraday gold price data are used in London, the OTC market, and the US futures market from 1997 until 2014. They found that although the volume of gold traded on the New York trading volume is less than the spot in London, but the futures market tends to play a more important role in the value of gold. COMEX's dominance was further strengthened in 2016 when the 24-hour trading platform fully electronic Globex began to be used. Since that time, COMEXgold prices always lead all day, no matter at what time does trade.

Here it can be concluded that the mere volume of trading alone is not as importantas the structure of the market. Futures markets provide similar benefits as the spot market for investors, speculators, and perpetrators of hedging. The futures marketmore transparent, highly liquid, and allows participants to make transactions more quickly, both with leverage or option, without involving the delivery of physical goods.

Therefore, the futures market reacted more quickly to the emergence of direct information and include it in the price of gold. Its effectiveness so high up to the price ofspot gold is simply derived from the price of gold futures, although theoretically this is the price of gold futures must be determined from the spot price, level of risk, the maturity of the contract, and other factors such as storage costs. In practice, the spot price in fact is precisely determined by the price of the futures contract monthclosest to the highest volume.


The Price Of Spot Gold Price Instead Of The Current Physical

It needs to be stressed here: "the price of spot gold" is not the price that is quoted on the last physical transactions as well as the price of physical gold at the moment,nor the gold price of reference London Bullion Market Association (LBMA). The spotgold price is the net value (net present value) of the price of gold futures on a nearby Moon, whereas the LBMA gold price is a picture of the gold price quoted traders in OTC spot market wholesale deals on London.

Furthermore, the "actual spot price", is the price offered by the sellers of gold bullion (bars and coins) in contrast to the spot price of COMEX nor the London Fix. Goldbullion seller typically showing higher prices, because they bear the costs greater than wholesale traders, and then me-the price markup for profit.

Conclusion

In the end, though, the markets concluded Sieron theoretically have been globalizing, but in practice remain bipolar with U.S. futures markets are in a dominant position on the process of the formation of the gold price. It's not manipulation, but shows that there is evidence of the high efficiency and centralization of the futures marketthere rather than the OTC market are decentralized and not transparent.

Thus such: gold prices are mainly determined in New York. And who determines theworld gold prices here? the participants and their trading position COMEX who determines the price of gold.

Best Forex Pair For Scalping

Best Forex Pair For Scalping

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As one of the popular trading strategies, scalping is a special activity that requires technique and basic preparation to produce his best potential. A lot of things to be aware of before you start using scalping techniques.

One thing to note is the best forex pairs for scalping. The best currency pairs to this technique is the pair with a tendency not to move with a sharp or not happen oftenunexpected leap. Select the appropriate currency pairs will not only affect our strategy but also profit.

There are three types of pair type corresponding to these techniques, is a pair of major, the pair carry, and exotic currencies. For starters, where are the best forex pairs for scalping?


1. Forex Major Pairs
That included a pair of main was EUR/USD, GBP/USD, USD/CHF and the pair formed from most currencies dominate the world economy. Although the JPY could be included into this group, they have a movement which is different from the other majorpairs. JPY are different and will enter in groups of pair carry.

The main properties of the major pairs are illiquid. The nature of the two is a relatively calm response against market turmoil. For example, the pair AUD/JPY can move up to 100 pips against a market turmoil, while at the same time the pair EUR/USD will only move as much as 30 pips away. Pair of major traded across the world almost by all banks and important institution. They become giants in the currency markets because the volume of trading and this move relatively slowly.
Scalper reliable tend to trade slowly and carefully to get the profit that the Conservatives will tend to choose the major currency pairs as best forex scalping for pair



2. Pair Carry
The pair carry is liquid currency pairs, but volatile. Currency pairs such as the EUR/JPY or USD/JPY traded around the world and their trading activity is pretty solid, but they are also very fast moving. This is due to the large number of perpetrators of financial currency using Japan to borrow and invest in various assets at risk. As a resultof market turmoil occurs, this forex pair will react with excessive and resulted in traders cannot be guessed easily pair movements, especially for users of scalping techniques that work in a short timeframe.

The pair Carry commonly traded to get flowers. Although it is possible to do a scalping, but this currency pair is not the best pair for scalping. Spread the pair could carry widens with rapid, even stop-loss will not be able to save your account from significant losses.

The change spreads widening is not surprising on a pair carry. Whereas, in such major forex pair EUR/USD, drastic movements like this are generally visible only after the release of the NFP data or change interest rates to major pairs. Compared to major currencies, the pair will carry begerak with frequency of more frequent, more deeply, and durable.

Therefore, it is not recommended for the novice trader to use the scalping techniques on a pair carry. Scalper trade generally reliable pair carry with General trends and follow the strategy for the strategy to exploit the sharp changes.



3. Exotic Currencies
Exotic currency is forex pairs are rare, less liquid, less known and thus not included in the best forex pairs for scalping. This group included in volatile currencies like theNOK/USD (NOK is Norwegian Krone), Russian ruble, BRL/USD (Brazilian real) and others.

These groups are not appropriate for scalping because the price difference is the unpredictability of making it difficult for scalper to predict changes in a short time. A trader with a scalping techniques should be able to avoid this exotic currency pairs in order not to lose money.



Conclusion :
It can be concluded that best forex pair for scalping is Major Pair Scalper can use the pair carry if you already found the best strategy for scalping on the pair. However, it is still advisable to take heart. In addition to the pair in what is best for scalping, traders will also need to pay attention to the spread of each before applying the strategy. Telalu large spreads can be detrimental to the scalper who play in the timeframe is low.

The exact period of time trading also noteworthy when scalping. Traders have tendencies select trading time in accordance with their strategies. Some users liked the scalping techniques time periods where market conditions have no direction, whereasanother scalper will choose trade on a market directional, high liquidity and diverse.This option corresponds to the tastes of each trader, as both offer different conditions. Choose a time that fits with your strategy.

Scalping is a strategy that requires concentration and special skills. If you want to try this strategy to get gains. keep in mind that a trader would have to test the strategy, choosing the best pair for scalping. Note also the policy broker where you trade.Choose a broker that provides a good trading conditions and allow scalping techniques.

Difference of Micro, Mini And Standard Account

Difference of Micro, Mini And Standard Account

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Often we encounter several brokers that offer on a real account. Of the broker is there on accounts with a variety of levels. There is a micro mini level, level, and standard levels. Type-type of the account allows traders choose the appropriate criteria to be appointed and the ability to trade him. Here we will examine how merchants can choose the type of account based on compatibility, and what are the advantages of each level on the account.

 

Standard Account

Is the most common account, where you have access to many types of currency pair, each worth $ 100.000. This does not mean that you have to deposit $ 100,000 capital when you first open an account. According to the rules of the margin and leverage (usually 100:1 in forex), it only takes $ 1.000 in margin accounts to one standard lot that will be traded.

Mini Account

A mini account allows traders to make transactions using the mini lot. In most brokers, mini lot is equal to $ 10.000, or one-tenth of the standard account. Most of the brokers that offer standard accounts will also offer mini accounts as a way to get new clients, who are hesitant to trade with a lot of standard because of the magnitudes of the margin they need to be deposited.

Micro Account

While on a micro account of just wearing one-tenth of a mini account. This means that traders can wear micro account to practice live trading. The size of the lowest trading on this account starting from 0.01 lots, while the recommended minimum capital normally above $ 200.

Here is a sample conversion and units:

1 lot = 100.000 units (1 Pip = $ 10)

1 mini lot = 10.000 units (1 Pip = S1)

1 micro lot = 1.000 units (1 Pip = 0.1 $)

Example when you open position buy EUR/USD at 1.7400, who later rose to 1.7425, or as many as 25 Points:

1 lot = US $ 10x25 Pip = US $ 250

1 mini lot = US $ 1x25 Pip = US $ 25

I micro lot = US $ 0.1 x 25 Pip = US $ 2.5

Now you already know how the capacity of the Fund and the transactions at each level of the account. When you are already proficient and have large capital, standard account is the right choice for you. But when the capital had only mediocre, opt for micro and mini accounts are the answer.

Our message is that you have to learn the types of accounts and how to trade in advance with steady, before entering into live trading. Do not use all your money if it is not ready to accept a number of disadvantages. Bertradinglah wisely, professional and don't be greedy.

 

Forex Terms

Forex Terms

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Inevitably, you must understand common terms in the world of forex trading well. This is certainly going to make the forex learning process more rapidly, as well as being able to understand properly. Some terms may have you look at the articles on this site. But it never hurts to review again in a more thoroughly.

Major and Minor Currencies

Eight types of the most common currencies traded: USD, EUR, JPY, GBP, CHF, CAD, NZD and AUD often known as Major. While other currencies outside of it, is called a small currency (Minor). You can ignore the minor currencies. Mostly on all kinds of writing (articles, analysis, predictions, etc.) about the forex will only review on your favorite currencies (USD, EUR, JPY, GBP, and CHF), why because the most liquid currencies, sexy, as well as many in the market forex trading.

Base Currency

Base currency = currency basis, is the first currency in the currency pair. In the writing of the base currency is always written to the left of the sign '/'. For example: USD/CHF, USD = base currency.

For example, if the price of USD/CHF current is 1.6300, then this means one CHF worth of 1.6300 us dollars. This shows how much the base currency measured against the second currency.

Quote Currency

Quote = the second currency, is the second currency in the currency pair. For example, USD/CHF, USD = Base Currency, CHF = the Quote Currency.

PIP

PIP is the smallest unit of unit price of any currency. Almost all currency pairs have five-digit numbers. With 1 first digit is a number followed by a 4-digit number principal fractional (behind the comma). For example the EUR/USD is equal to 1.2420 in this case, one pip is equal to the smallest changes on the fourth decimal i.e. 0.0001, so if on a pair where there is a USD, then one pip is always equal to 1/100 cent. There is however one exception only in USD/JPY, here 1 pip is worth $ 0.01

Bid Price

Bid price = bid price, the price at which the market is ready to buy a certain currency pair. Or in other words for us/trader is the price for which we can sell.

For example, the currently displayed price of GBP/USD 1.8800/1.8803, then 1.8800 = bid price and the ask price = 1.8803. If you intend to sell GBP then its value is 1.8800

Ask Price

Ask price = bid, as opposed to the bid price, then this means the price for which the market is ready to sell a specific currency, or for us (trader) is the price for which we can buy.

Like the example above GBP/USD 1.8800/1.8803, then = 1.8803 ask price, if you intend buying the GBP price is then 1.8803

Spread

The spread is the difference between the bid and ask price. The bid price is always and is generally smaller than the ask price. Following the example above GBP/USD 1.8800/1.8803, this means the spread is 3 pips.

Quote

The quote could be said as a general writing format in forex (raw) to inform the price movement of a pair. This format is :

Base currency/Second currency Bid price/Ask price

for example: GBP/USD 1.7750/1.7753 84.90, USD/JPY/84.94

Cross Currency

Currency cross pair/couple is the currency in which the U.S. currency does not exist in it. For example, the EUR/GBP GBP/JPY. Suppose you buy the EUR/GBP EUR/USD = buy and sell GBP/USD. In general the pair Cross often bring higher transaction costs.

Margin

The margin is the Fund balance/mandatory reply available, will be set aside by the broker every time you open/new order. What is the magnitude of the margin? It will depend of the magnitude of the contract, leverage, lot.

For example, let's say you open a mini account with leverage 200:1 or 0.5%. Where one mini lot is equal to $ 10,000. If you open a lot of transactions, then the margin is $ 50 ($ 10,000 x 0.5% = $ 50).

Leverage

Leverage is the ability to control/dealing with a large amount of dollar by using relatively small amounts of capital wrote. With a ratio of ordinary brokers provide is varied from 100:1 to 400:1

Illustration of leverage is: Suppose you have $ 5,000 in cash margin account with 100:1 leverage, you could buy up to $ 500,000 worth of currency. Can I be this now you have $ 500,000 purchasing power.

With more buying power, you can increase your profit potential. But the opposite is also proportional to the potential damage/loss yg will you experience.

Margin = Leverage + Possible Combinations Of Potential Lethal

So be careful in choosing the leverage!!

Margin Call

Generally traders will begin to feel anxiousness and fear when a broker tells that the remaining balance/balance you've got smaller falls below the minimum level requirements, as a result of the open position has moved against you.

If position reply against (loss) until a threshold specified in the reply, then the broker will close order (can be a partial/total).

A margin call can be avoided with intensive monitoring your account balance. Or by using the command/stop-loss facilities on every order to limit the risk of loss.

The Rules and How To Forex Trading

The Rules and How To Forex Trading

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For those of you who are still a novice in the world of Forex, and you wonder, how to play forex trading it? The answer is easy.

The Infrastructure Of The Forex

Before entering into a trading, we first explain about the supporting infrastructure. For online forex trading takes only PC computer, and Internet connection. Coupled with a software application that can be downloaded and used for free. A very easy way. To view the illustrations online trading directly on your computer with a demo-account, you can read the instructions here. And also forex trading can be done at any time, read in time and hour forex trading, for more details.

The Basic and The Way of Forex Trading

Basically play forex is predicting a currency pair that later value will rise or fall. And confidence of the predictions that we make in opening trading position (open position).

In forex there are only 2 types of open positions :
1. BUY/LONG : predict the value of the pair is going up
2. SELL/SHORT : predict the value of the pair is going down

For more details see the illustration below :

1. Smith entry at position of BUY EUR/USD at 1.3000, after a certain time
Smith CLOSE 1.3064, then Smith benefit 64 pips
If Smith CLOSE at 1,250 then Smith losses 50 pips

2. John entered in position SELL GBP/USD at 1,500, after a certain time
John CLOSE at 1,400 then John 100 pips profit
If John CLOSE at 1,650 then John losses 150 pips

Note:
- Close meaning is closing trading is running or open.
- Pip is the smallest unit in the forex.

Conclusion :

- Requirements/infrastructure in forex trading online is very easy and cheap.
- The basics of forex trading is very simple:
Buy if it predicts will be rising, and Sell if it predicts will decline.
And if the predictions are correct then it would gain, if not otherwise.
- Infrastructure, ways, and rules for trading forex is easy, just how trading correct in order to be a winner/profit, it wrote.

What Is A Demo Account On Forex Trading - Demo Account Definition

What Is A Demo Account On Forex Trading - Demo Account Definition

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Perhaps you are new to know about forex (newbie), or you are in a position to learn about forex. Then, it's good you know with what is called with the demo account.

Definitions Demo Account

The demo account is a type of account the reply provided by the majority of the online forex broker, where with the trader's account (newbie/beginner) can trade forex online as in reality, but not at risk of losing money or capital.

The trader can look at applications that are provided as to what was actually happening in the forex market today. Plus, the trader can also perform operations open buy/close, practice strategies and so complete and thorough.

However, there is a different one, namely balance or on the source of funds. If on a demo account, fund/balance is included in a virtual course or just toy Fund.

So: If win, gain/profit is also not worth the money because a toy/virtual course. Otherwise, once lost, you also do not need to change or loss in actual (real money), fear not the broker will not charge you for losses that occur in this demo account :)

The Purpose Of A Demo Account

* For those who are new, the demo account will give you a very real imagine, about online forex trading.

* Ability To ripen in the forex trading before traders decided to use a real account.

* For testing, or build a trading system with more freely, without having to fear to bear the loss when making a mistake.

* For those who want to join to the broker, then could try demo account first to see how the technical performance (server, speed, etc.) from a broker.

How To Create A Demo Account

Generally there are no special requirements. You simply register at the broker, and then download and install the application to your computer. All application or registration. You can do it all very easily and quickly (it was not until 10 minutes). And you can instantly view or practice trading forex online.You can create a demo account in your best broker.

Conclusion

* Demo account is free which is very much beneficial for traders/newbie to be able to see, learn, and get to know more about online forex trading.

* Because it is only using the virtual currency/toys, then the risk of defeat was physically not there.

* Although the demo gives an overview that is almost as fact, but by no means 100%. Keep there is a difference with a real account. Especially from the psychological side, and emotional. Trading risk, will certainly give very different pressures.